Going into the video game business as an independent company

I know of video game creation schools where students are told, "the game companies will just enslave you, start your own company." (This tends to happen at schools that are located far from video game companies.)

In any case, some people have an entrepreneurial frame of mind and want to start their own companies rather than work for someone else.

Also you may at some time have reason to deal with a small or startup company. At that point it's your duty to yourself to "scout" the company and find out whether they seem to understand their business, or if they're in cloud-cuckoo-land.

I have a few observations about starting a company.

First, a viable business plan is absolutely necessary. You do not want to just stumble into conducting a business the way you might stumble into playing a game. There is no "save game", no "start over"--if you fail, you're done. Many times, if you diligently research a business plan, you'll find that what you thought was reality, isn't. That may or may not change your mind about starting a company, and certainly may change how you go about it, but it's always better to have the option than to blindly go forth.

Even if circumstances change, you can adjust your plan as you go. The most important thing about planning is that it makes you think about what's supposed to happen and where you're trying to go. If you don't know where you're going, how can you ever get there? "Dumb luck" is not a business plan.

When you deal with a small or startup company, if they say something like "business plans don't matter because so many things change so quickly" or "business plans don't matter because no plan survives first contact with the enemy", RUN, don't walk, away from them. In effect, they're hoping to fight fires as they arise, rather than engage in fire prevention. They're hoping rather than planning. They're in cloud-cuckoo-land.

Second, "passion" and "hustle" and "hard work" are not going to magically make you succeed where others have failed. Do you think other startup companies didn't have those characteristics? Especially in the game industry, doesn't everyone who starts a new game company think he's passionate and a hustler and a hard worker? Don't even the big game companies expect people to work ridiculous hours and be very passionate? ("Ridiculous" hours because it's been well known for decades that after several weeks of working, say, 60 hours a week, you'll be no more effective than you were when you worked 40 hours, despite spending more time. This is one reason why most industries have 40 hour workweeks.)

If the small or startup company you're dealing with says they succeed on "passion" or "hard work", most likely they're hoping to succeed, not planning to succeed. Somehow "a miracle will occur". And you know, occasionally it does--but mostly not. If they tell you they're going to succeed where others have not, because they're so passionate about games and they're going to hustle so much, maybe you should find someone who talks business instead of football pep-talk.

Finally, know what business you're in. If you intend to make video games, make sure you behave as though you're in the entertainment business, not the technology business or some other business. There are exceptions, but most of the time video games exist to entertain. See my earlier post "what business are you really in?"